Economy 11 September 2019 What the government's no-deal Brexit planning says, and what it means The government has been forced to publish the assumptions driving civil service planning for a no-deal. Here's what it says. Photo: Getty Sign UpGet the New Statesman's Morning Call email. Sign-up Following a vote of Parliament, the government has been forced to publish the details of Whitehall’s operating assumptions about how a no-deal Brexit will play out – these are the assumptions that underline the government’s planning for a no-deal Brexit. Here’s what it says – and what that means and reveals. “When the UK ceases to be a member of the EU in October all rights and reciprocal arrangements with the EU end.” Simple enough. When we cease to be a member of the European Union, the various agreements and treaties we have with the rest of the European Union, and the rights and obligations we have with other member states, will end. What we’re seeing now is the gradual disproving of the referendum campaign’s biggest lie, one advanced by both campaigns, for different reasons: which is that our four-decade membership with the European Union was a small thing with limited consequences for the type of country we are that meant very little about the choices our politicians could make and could be unpicked very quickly. “The relationship between the UK and the EU as a whole is unsympathetic, with many member states (under pressure from the Commission) unwilling to engage bilaterally and implementing protections unilaterally, though some member states may be more understanding.” As we will see, the most important shift brought about by a no-deal Brexit is we go from being a member state of the European Union, with both obligations to the other member states that we have to honour, but also rights that other member states have to uphold, to a third country with neither. Essentially, the reason why a British driver can go through ports at Calais and Dover without incident is because of their rights as an EU citizen. So the important assumption here is that member states will not be minded to do anything they are not legally obliged to, partly because of general antipathy to a no-deal Brexit Britain and partly because of pressure by the European Commission not to do anything which reduces the EU’s leverage in trade talks after a no-deal Brexit. “No bilateral deals have been concluded with individual member states, with the exception of the reciprocal arrangement on social security with Ireland.” This means that in the event of no-deal, no agreements between the United Kingdom and individual member states have been reached to mitigate the consequences of a no-deal. This isn’t to say that these will definitely not happen – but this is what the government’s preparations for no-deal assume. This is a pretty solid assumption – ultimately, the interests of EU member states are served by a no-deal Brexit being fairly disruptive, as that increases the prospects of a speedy resolution and a rapid agreement being concluded between the EU and the UK, one that, in the minds of most EU diplomats, would essentially resemble the withdrawal agreement in all important aspects. “Public and business readiness for a no-deal will remain at a low level, and will decrease to lower levels, because of the absence of a clear decision on the form of EU Exit (customs union, no deal etc.) does not provide a concrete situation for third parties to prepare for.” This is civil-service speak for: the underlying assumption is that neither households nor businesses will be particularly well-prepared for no deal, because there is no clarity or guidance as to what they should prepare for, as the government’s rhetorical position is that its no-deal posture will secure it a fantastic Brexit deal, the details of which are yet to be made clear to anyone. “Readiness will be further limited by increasing EU exit fatigue, due to the second extension of Article 50, which will limit the effective impact of current preparedness communication.” This is civil-service speak for: everyone is sick of hearing about Brexit, and we told them they needed to prepare for a no-deal in March and then it didn’t happen, so you might as well just set that £100m you put aside for no-deal adverts on fire than hope that anyone pays attention to hose adverts now. “Business readiness will not be uniform – in general larger business across sectors are more likely to have better developed contingency plans than small and medium sized businesses.” Big businesses will, on the whole, be better prepared for no-deal than small businesses and most businesses will be inadequately prepared. The bigger your business is, the easier it is to absorb the cost of preparing for something that might not happen. In general this is if anything too optimistic – big businesses, like small and medium-sized enterprises, have tended to underestimate the chances of no deal and see many of their competitors making inadequate preparations for it and see little reason to bother, particularly if they are in sympathetic and politically sensitive industries which might be the receipt of government bail-outs. “Business readiness will be compounded by seasonal effects, impacting on factors such as warehouse availability.” Businesses, who will already be stockpiling to prepare for Christmas, are going to have less capacity to stockpile for the effects of no deal. “Concurrent risks associated with autumn and winter such as severe weather, flooding and seasonal flu could exacerbate a number of impacts and stretch reosurces of partners and responders.” This means: if there are floods, if people are off sick, the police officers and soldiers you’re expecting to deal with the consequences of no-deal might be dealing with floods or at home with the flu, so good luck with that. “Private sector companies’ behaviour will be governed by commercial considerations, unless influenced otherwise.” Business is not going to take losses or disruption on the chin to make a success of Brexit or to help the government out. So those are the assumptions for the general backdrop to no deal: what do they mean for what the government is planning to do to mitigate it? “For the purpose of freight flow and traffic management, as 31 October is a Thursday, day one of exit is now on a Friday rather than a weekend, which is not to our advantage.” Had we left on 29 March without a deal, it would have happened on the weekend, when there would be less traffic on the roads, which would have made it slightly easier to manage disruptions to the flow of goods and traffic between the EU and the UK. One of the recurring themes in this document is a not-particularly well-hidden message of “if you really wanted to do this, you ought to have done it in March”. “Exit day may coincide with end of October half-term school holidays, which vary across the UK.” I don’t need to translate this – the end of half-term also has implications for levels of traffic. However, it is worth noting because it speaks to a neglected truth about the government’s no-deal planning: there’s no reason why a government that was genuinely serious about planning for no-deal couldn’t mandate that half-term gets moved about a bit in this circumstance. But as with the failure to seriously invest in the infrastructure that you’d need to even make a half-decent fist of managing no deal, the government’s no-deal planning is basically only serious when it doesn’t have to choose between seriousness and upsetting Leave voters. “In a small number of instances where the impact of Brexit would be felt negatively in the EU as well as in the UK, member states may act in a way which could also benefit the UK (e.g. energy for Ireland)” Our operating assumption is that some no-deal contingency planning and responses, such as Ireland, where Ireland and Northern Ireland have a shared energy grid and market, will mitigate some of the fallout. “France will impose mandatory controls on UK goods on Day One of No Deal” Remember when I said the key assumption is that relations between member states and the UK are bad? This is why. Essentially, the big problem caused with no deal will be that smooth and frictionless trade between the UK and the EU will drop away overnight – almost all of the other problems result from that. The more delays at ports, the longer it will take essential items to get into the UK. The UK, as we’ll see below, plans to conduct little to no checks at first in order to combat this. However, their expectation is that France won’t. This is a well-founded expectation, as doing so would significantly reduce the EU’s leverage and with it reduce the chances that the UK would reach a swift accord with the EU, the French government’s major strategic priority as far as Brexit is concerned, the better to allow the EU to move on and focus on other things. This will be particularly acute for medicines, because, as the document notes, many medicines cannot be stockpiled for very long because of their limited shelf life. “UK citizens travelling to and from the EU may be subject to increased immigration checks at EU border posts. This may lead to passenger delays at St Pancras, the Channel Tunnel, and Dover” In addition to trade disruption, angry passengers may kick off when they end up missing their train or waiting for ages for the Eurostar, a ferry or in their car before getting into the Eurotunnel. “Demand for energy will be met and there will be no disruption to electricity or gas interconnectors.” Good news: we will still be able to heat and light our homes. Bad news: our 1970s retro aesthetic will remain incomplete. “Air freight capacity and the special important scheme is not a financially viable mitigation to fully close risks associated with all UK veterinary medicine.” What this means is: why don’t we just fly in medicine to keep animal diseases contained and managed? Well, minister, because you’re gonna have to be willing to fork over a lot of money to do so, and you ain’t. “Certain types of fresh food supply will decrease. Critical dependencies for the food supply chain, such as key input ingredients, chemicals and packaging, may be in shorter supply. In combination, these two factors will not cause an overall shortage of food in the UK but will reduce availability and choice of products, and will increase price, which could impact vulnerable groups.” There will be enough to eat, but there will be less choice and what you can buy will be more expensive. This will be particularly painful for the poor. “The UK growing season will have come to an end” Because we are leaving in October, a no-deal Brexit would take place at a time when our dependency on food from outside the UK is pretty high, making all this worse. “The Agri-food supply chain will be under increased pressure at this time of year, due to preparations for Christmas, which is the busiest time of year for food retailers.” Did I mention that recurring theme that if the government really wants to do this, they really couldn’t have picked a worse time than autumn? Well, here it is again: preparations for Christmas will exacerbate the problem. “Government will not be able to fully anticipate all potential impacts to the agri-food supply chain. There is a risk panic buying will cause or exacerbate food supply disruption.” This is civil-service speak for: look, we can see that there is enough food in the country, but I cannot guarantee, minister, that people won’t kick off in supermarkets or do other things that makes the problem worse than we anticipate. “Public water services are likely to remain largely unaffected due to actions now being taken by the water companies.” There will still be clean water. That’s good. “The most significant single risk is a failure in the chemical supply chain. The likelihood of this occurring is considered low and the impact is likely to be localised, affecting up to 100,000s of people.” But we can’t guarantee that there won’t be some isolated cases in which untreated water makes people sick, but don’t worry minister, they won’t be a large enough group to lose you the election. “UK nationals will lose their EU citizenship and, as a result, can expect to lose associated rights and access to services over time.” The British diaspora in the EU will face an uncertain position, because while all member states have now published their legislative responses to Brexit, the level of generosity hugely varies across member states. “An EU member state would continue to pay a pension it currently pays to a UK national living in the EU.” Pensioners living in the EU will continue to receive their pensions from EU member states. Remember, the only rule of politics is that pensioners always win. “Protests and counter-protests will take place across the UK and may absorb significant amounts of police resource. There may also be a rise in community tensions.” Opponents of a no-deal Brexit will organise protests, as will supporters. This will pull police away from important roles like adjudicating a punch-up over the last avocado in the supermarket. (See above.) “Regional traffic disruption caused by border delays could affect fuel distribution.” One of the essential items that could be disrupted by chaos at ports is fuel. “A big scary block of redacted text.” This redacted text is understandably freaking people out who have read this far. It refers to the consequences of fuel shortages – you can tell because the next point is: “Low income groups will be disproportionately affected by any price rises in food and fuel.” No kidding. “On Day One, the government will operationalize the ‘no new checks with limited exceptions’ model announced 13 March” To minimize all this potential disruption, the UK will very sensibly avoid doing as many checks as it can. But… “The model is likely to prove unsustainable due to significant economic, legal and biosecurity risks, and no effective unilateral migrations to address this will be available” The problem with this approach is that it means that you can’t check that anything untoward is getting in, and you wouldn’t be able to do it for very long. And there are Northern Ireland specific consequences here, too. “This will be particularly severe in border communities where both criminal and dissident groups already operate with greater threat and impunity. Given the tariff and non-tariff barriers to trade, there will be significant pressure to agree new arrangements which supersede the day one model within days and weeks.” As there are particular risks with this approach on the Irish border, despite everything we’ve said about how we aren’t going to put a hard border up, we would have to do so pretty quickly. “There is an assumption that there will be no major change in adult social care on the day after EU exit, the adult social care market is already fragile due to declining viability of providers.” While we don’t anticipate that no deal will cause an immediate reduction in our ability to provide adult social care, the sector is in such a mess that we fear it will keel over in short order afterwards. Now, none of this is certain to happen – it all hinges on the essential question of what happens at borders on day one and how long no deal continues. These are the government’s reasonable assumptions of what they expect to happen. It could be better or worse. But these are the assumptions that the government held on 2 August – and these are the outcomes that they were planning for at the time. › The Dutch House by Ann Patchett is a gripping examination of what makes a home Stephen Bush is political editor of the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics. Subscribe For more great writing from our award-winning journalists subscribe for just £1 per month!